In eight countries, the iPhone X already accounts for over 2 percent of the iPhone active installed base just three weeks after its first availability on November 3. The leading countries for iPhone X adoption are markets with high gross domestic product (GDP) per head such as Singapore, Denmark, Switzerland and Japan.

IHS Markit is able to use its unique measurement of active installed base data to provide very early insights into how the iPhone X is performing, well in advance of the availability of shipment data.

iPhone X does best in markets where iPhone Plus is popular

Countries where “Plus” model iPhones have been successful in the past have a strong correlation with initial levels of iPhone X adoption. Consumers in those markets have a greater interest in larger displays and high-quality dual cameras, as well as the willingness to pay the higher price a Plus model or iPhone X costs over regular-size iPhones.

Despite production constraints, in the markets where iPhone X has launched, initial uptake is very similar to adoption of previous iPhone flagship launches in the same launch period. This indicates good demand for iPhone X and is better than the rumored supply.

In the US, iPhone X adoption after three weeks matched the adoption of iPhone 8 Plus and beat early adoption levels for both the iPhone 8 and 7 Plus. Only the iPhone 7 model had greater initial success. In Japan, initial iPhone X adoption was as good as or better than any recent iPhone launch, and matched the level of the iPhone 7.

Apple will enjoy record-breaking iPhone performance in 2018

We expect Apple will enjoy its best ever year for iPhone. IHS Markit forecasts each of the next four quarters will see increases year-on-year in iPhone shipment volumes, compared to the same quarter a year earlier.

In the fourth quarter of 2017, IHS Markit forecasts Apple will ship 88.8 million iPhones — this will be the greatest number of iPhones ever shipped in one quarter.

Apple will need to ship just 31 million iPhone X units for iPhone average selling price (ASP) to exceed $700 for the first time in the iPhone’s 10-year history, assuming total shipments amount to 88.8 million.

iPhone X represents a shrewd strategy from Apple. In a maturing smartphone market, consumers may choose to buy replacement smartphones less often. If so, the higher price of the iPhone X means Apple could gain similar revenue levels and profits at lower shipment volumes. If Apple can increase unit shipments instead, then iPhone X will drive significantly higher iPhone profits.